Lesotho

Lesotho is a landlocked country, surrounded by South Africa, with a land mass of 30,355km², population of 2.3 million people and a GDP of US$2.5bn which is expected to grow by 2.2% in 2025.
Its currency is the Lesotho Lot which is pegged to the South African Rand.

Previously a British protectorate, it gained independence on October 4, 1966. Lesotho is a constitutional monarchy, ruled by a king as head of state and a prime minister as head of government.

Real growth in GDP is projected to rise to 1.7% in 2024 and 2.2% in 2025 with expected recovery in the mining and manufacturing sectors. The fiscal balance is projected to deteriorate from a surplus of 1% in 2023 to a deficit of 0.4% of GDP in 2024 and then to 3.3% in 2025 owing to elevated expenditures associated with the second phase of the Lesotho Highlands Water Project. The current account deficit is projected to deteriorate further to 3.4% in 2024 and 4.2% in 2025 due to an increase in imports associated with the second phase of the Lesotho Highlands Water Project.

The agriculture and the services sectors are also expected to drive growth. The services sector is expected to benefit from the positive spillovers of the construction subsector, even though some gains are likely to be offset by elevated consumer prices. The services sector is also expected to add impetus to growth due to improved business and consumer confidence. The agricultural sector is expected to continue to register positive growth on account of good harvests envisaged for crops, due to government subsidies for inputs like seeds and fertilisers.

Strong growth is expected in the mining industry due to an improved market outlook for rough diamonds and the current upsurge in commodity prices. The return to full-scale production of some the mines, under care and maintenance in 2021, is expected to improve the sector’s performance.


Sources: Who Owns Whom sector reports, CIA Factbook, African Development Bank, World Bank, Trading Economics, African Statistical Yearbook and IMF. ?>